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High Court Of Calcutta
Ruma Pal
MOHAN LAL PANDIT - Appellant
Versus
COLLECTOR OF CUSTOMS - Respondent
Matter 1739 Of 1994
Decided On : 11/15/1994
CUSTOMS - Suspension of License - Revocation of License - Natural Justice - Principles of Natural Justice - Compliance with Principles of Natural Justice - Inquiry Report - Reliance on Statements of Persons Not Examined in Petitioner's Presence - Violation of Principles of Natural Justice - Impugned Order and Inquiry Report Set Aside - Suspension Order Continued.
Fact of the Case:
The petitioner, a Customs House Clearing Agent, challenged the revocation of his license by the Collector of Customs. The revocation was based on allegations of violation of Customs House Agents Licensing Regulations. The petitioner claimed that the impugned order was passed in violation of the principles of natural justice and Regulation 23.
Finding of the Court:
The court found that the inquiry report and the impugned order were nullities as they were passed in violation of the principles of natural justice. The court held that the petitioner was not given an opportunity to cross-examine the persons whose statements were relied upon in the inquiry report and that the Collector also relied upon the voluntary statements of the employees of the Stevedores, Steamer Agents and others to hold the petitioner guilty without making available copies of these statements to the petitioner.
Issues: 1. Whether the impugned order and inquiry report were passed in violation of the principles of natural justice? 2. Whether the suspension order survived the setting aside of the impugned order and inquiry report?
Ratio Decidendi: 1. The court held that the inquiry report and the impugned order were nullities as they were passed in violation of the principles of natural justice. The court held that the petitioner was not given an opportunity to cross-examine the persons whose statements were relied upon in the inquiry report and that the Collector also relied upon the voluntary statements of the employees of the Stevedores, Steamer Agents and others to hold the petitioner guilty without making available copies of these statements to the petitioner. 2. The court held that the suspension order continued to be operative as the petitioner had not sought for the setting aside of the show cause notice and it was not argued that the proceedings must be initiated de novo.
Final Decision: The court set aside and quashed the inquiry report and the impugned order. The court directed the Enquiry Officer to hold the inquiry afresh and provide copies of all documents and produce persons for cross-examination as required by the petitioner. The court also clarified that the Collector would not rely upon any material collected behind the back of the petitioner without furnishing the same to the petitioner. The court directed that the proceedings must be completed within four weeks from the date of communication of the order and that the suspension order would also continue for a period of four weeks.
( 1 ) THE petitioner who has been carrying on the business is a Customs House Clearing Agent being licensed to do so issued under the Customs House Agents Licensing Regulations, 1984 (referred to as the Regulations) has challenged the revocation of his Licence by the Collector of Customs. The impugned order is dated 19-8-1994 and has been issued under the Regulations 21 (b) (c) read with Regulation 23 (7) of the Regulations for violation of Regulations 14 (d), (e), (1) and 28 (7) by the petitioner.
( 2 ) THE ground for challenge is that the impugned order has been passed in violation of the principles of natural justice and Regulation 23.
( 3 ) THE incident in respect of which the petitioner's Licence has been revoked took place in February, 1994. The allegation of the Customs Authorities is that the petitioner in conspiracy with the exporter had attempted to illegally export rough sandalwood by misdeclaring the same to be "machine finished knife handles made of sandalwood" and "refuse for joss sticks". It is not necessary to consider the facts in detail in this application in so far as they relate to the merits of the allegations in this petition. Suffice it to say that the consignment was seized after examination on 25-02-1994. After an enquiry on 17-5-1994 a Memo was issued by the Collector of Customs alleging that on the basis of enquiry conducted and statements from various persons it was revealed that the petitioner and his employees had failed to discharge their responsibility/obligations cast on them by Regulation 14 of the Regulations amounting to gross misconduct within the meaning of that Regulation. An enquiry against the Firm M/s. Shaikh and Pandit and of which the petitioner claims to be the proprietor, Tushar Pandit and S. K. Jha being contemplated the Collector in exercise of powers vested on him under Regulation 21 (2) of the Regulations ordered the suspension of the petitioner's Licence with immediate effect. It was also recorded that it was an appropriate case where immediate action was necessary.
( 4 ) THE petitioner sought to exonerate himself from all liability as alleged in the suspension memo by three separate letters dated 23-5-1994, 30-5-1994 and 14-6-1994.
( 5 ) ON 1st July, 1994 the petitioner moved a writ application (hereafter referred to as the First Writ Application) challenging the order of suspension dated 17-5-1994. The writ application was heard and disposed of by an Order dated 01-7-1994 by T. Chatterjee, J. by directing the Customs Authorities to complete the proceedings and pass a final order within six weeks from the date of the order without granting any adjournment on any ground whatsoever after giving the petitioner reasonable opportunity of hearing and after passing a reasoned order. No appeal was preferred by either party from this order.
( 6 ) ON 20-7-1994, a Show Cause Notice was issued by the Collector of Customs, the language whereof was substantially similar to the Memo dated 17-5-1994. In addition it was stated that -"the investigation revealed that M/s. Shaikh and Pandit is directly involved in clandestine attempt to export Sandal Wood consignments out of India in collusion with the above-mentioned exporters violating the provisions of Customs Act, 1962 read with Import-Export Policy 1992-97, rendering them liable for action in terms of provisions of Regulation 14 (d), (e) and (1) of the Customs House Agents Licensing Regulations, 1984. "it was, also alleged that M/s. Shaikh and Pandit have"failed to exercise such supervision as may be necessary to ensure the proper conduct of their employees S/shri Tushar Pandit and Surya Kanta Jha in the transaction of business as an agent renders them liable for responsible for all acts and omissions of their employees in terms of provisions of Regulation 20 (7) of the Customs House Agent Licensing Regulations, 1984 also. "
( 7 ) THE show cause notice also intimated the petitioner that the explanation should be submitted
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